Audit of Controls Over Funds Provided for the Replenishment of Defense Articles and the Reimbursement for Services Provided to the Government of Ukraine Through Presidential Drawdown Authority

Rec. A.1.b: The DoD OIG recommended that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, include the January 8, 2025 memorandum, "Update to the General Business Rules for Use of Drawdown Authority and Replacement of Items and Reimbursement for Services Provided Under Presidential Drawdown Authority," into DoD Regulation 7000.14?R, "DoD Financial Management Regulation."

Rec. A.1.d: The DoD OIG recommended that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, require the Military Departments, in coordination with the following officials, to develop the policies and procedures needed to ensure that they retain supporting documentation for actual costs for the purpose of reconciling between billed costs and reimbursed amounts associated with Presidential Drawdown Authority replenishment funds.

Rec. A.1.d.2: The DoD OIG recommended that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, require the Military Departments, in coordination with the Assistant Secretary of the Navy (Financial Management and Comptroller), to develop the policies and procedures needed to ensure that they retain supporting documentation for actual costs for the purpose of reconciling between billed costs and reimbursed amounts associated with Presidential Drawdown Authority replenishment funds.

Rec. A.1.d.4: The DoD OIG recommended that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, require the Military Departments, in coordination with the Assistant Deputy Commandant for Programs and Resources of the Marine Corps, to develop the policies and procedures needed to ensure that they retain supporting documentation for actual costs for the purpose of reconciling between billed costs and reimbursed amounts associated with Presidential Drawdown Authority replenishment funds.

Rec. A.1.f: The DoD OIG recommended that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, review the supporting documentation of the 12 reprogramming actions in our sample that total $1 billion in questioned costs, in coordination with the following officials, to determine whether the replenishment funds were used in support of the Ukraine Presidential Drawdown Authority replenishment mission, and take appropriate actions to resolve any costs that are not in support of the Ukraine Presidential DrawdownAuthority replenishment mission.

Rec. A.1.f.2: The DoD OIG recommended that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, review the supporting documentation of the 12 reprogramming actions in our sample that total $1 billion in questioned costs, in coordination with the following officials, to determine whether the replenishment funds were used in support of the Ukraine Presidential Drawdown Authority replenishment mission, and take appropriate actions to resolve any costs that are not in support of the Ukraine Presidential Drawdown Authority replenishment mission. The Assistant Secretary of the Navy (Financial Management and Comptroller) should review one reprogramming action, totaling $1 million in questioned costs.

Rec. B.1.a: The DoD OIG recommended that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, update the January 8, 2025 memorandum, "Update to the General Business Rules for Use of Drawdown Authority and Replacement of Items and Reimbursement for Services Provided Under Presidential Drawdown Authority," to:1. Establish a requirement for unobligated funds to be returned no later than 60 days before the period of availability expiration of the originating Defense?Wide Account or Military Department account, whichever is earlier, unless an exemption to policy is approved by the Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD. 2. Establish requirements for the Military Departments to design and implement regular and recurring monitoring controls over replenishment funds, in accordance with the Government Accountability Office's "Standards for Internal Control in the Federal Government," and validate the obligation and execution data within ADVANA are accurate on a monthly basis. 3. Establish a requirement for the Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, to design and implement regular and recurring monitoring controls over the obligation and execution data that are validated by the Military Departments.

Rec. B.1.c: The DoD OIG recommended that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, require the Military Departments, in coordination with the following officials, to perform a comprehensive review to identify excess replenishment funding in an unexpired account that cannot be returned to the originating account. Upon identification, the Military Departments should evaluate whether the funds can be used to procure items from the Ukraine replenishment backlog and obtain approvals to use the excess funds consistent with the current General Business Rules. The Military Department officials should also design, document, and implement internal controls to ensure compliance with the General Business Rules requirements, including subsequent revisions made based on Recommendation B.1.a.

Rec. B.1.c.2: The DoD OIG recommended that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, require the Military Departments, in coordination with the Assistant Secretary of the Navy (Financial Management and Comptroller), to perform a comprehensive review to identify excess replenishment funding in an unexpired account that cannot be returned to the originating account. Upon identification, the Military Departments should evaluate whether the funds can be used to procure items from the Ukraine replenishment backlog and obtain approvals to use the excess funds consistent with the current General Business Rules. The Military Department officials should also design, document, and implement internal controls to ensure compliance with the General Business Rules requirements, including subsequent revisions made based on Recommendation B.1.a.

Rec. B.1.c.4: The DoD OIG recommended that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, require the Military Departments, in coordination with the Assistant Deputy Commandant for Programs and Resources of the Marine Corps, to perform a comprehensive review to identify excess replenishment funding in an unexpired account that cannot be returned to the originating account. Upon identification, the Military Departments should evaluate whether the funds can be used to procure items from the Ukraine replenishment backlog and obtain approvals to use the excess funds consistent with the current General Business Rules. The Military Department officials should also design, document, and implement internal controls to ensure compliance with the General Business Rules requirements, including subsequent revisions made based on Recommendation B.1.a.